Profitt Report: What you need to know about store credit cards before holiday shopping
As you head out into the holiday shopping season, you’ll probably receive the same question more than once: do you want to open a store credit card? Deals and discounts attached to these cards are alluring and many consumers are signing up. In fact, more people open store credit cards during this time of year and that’s not necessarily a bad thing! You just need to read the fine print.
“The average interest rate you see on one of these cards is almost 25 percent,” said Matt Schulz with CreditCards.com.
On the other hand, the average interest rate on all types of credit cards is about 16 percent according to Schulz. So, is a store credit card right for you? It depends on your spending habits.
“If you buy something with that new card, get a discount and then pay it off at the end of the month it can be a really great deal. The trouble comes when you can't pay that off at the end of the month and you end up accruing an awful lot of interest,” said Schulz.
Next, pay attention to deferred interest programs, where you buy something at zero percent interest for a set period.
“If you haven't paid the balance off in full, you will be charged interest dating all the way back to when you made that purchase and you will be charged interest for the entire purchase amount,” Schulz said.
He said, don’t feel pressured to sign up for a card in a split-second. Instead, take some time to learn about it.
“If you are offered one of these cards at the counter and you're not sure, say no and take some information home with you and read about it,” Schulz said, “then, if it's still sounds like a good offer, then you can apply for it the next time you go to that store.”
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